Union Budget 2024: New Proposal Cuts Basic Customs Duty on Mobile Phones, PCBAs, and Chargers to 15%

In her latest budget proposal, Finance Minister Nirmala Sitharaman has put forth a significant change aimed at the mobile industry. The proposal suggests reducing the basic customs duty (BCD) on mobile phones, mobile printed circuit board assemblies (PCBAs), and mobile chargers to 15%. This move reflects the government's confidence in the growing capabilities of India's domestic mobile manufacturing sector.

Reduction in Basic Customs Duty

Finance Minister Sitharaman's proposal to lower the basic customs duty on mobile phones, PCBAs, and chargers aims to bolster the Indian mobile phone manufacturing ecosystem. The current duty on these items is higher, and the reduction to 15% is expected to encourage further growth in domestic production. This change comes as part of the government's ongoing efforts to support the industry through various fiscal measures.

Impact on Domestic Manufacturing

The reduction in BCD is seen as a vote of confidence in India's ability to produce mobile phones locally. The mobile industry in India has grown significantly over the years, thanks to fiscal interventions such as the Modified Special Incentive Package Scheme (M-SIPS), the Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS), and the Production Linked Incentive (PLI) Scheme.

Mayank Arora, Director at Nangia & Co, stated that lowering the basic customs duty (BCD) on mobile phones, PCBAs, and chargers to 15% shows confidence in India's local manufacturing. He pointed out that the industry has already gained from programs like M-SIPS, SPECS, and PLI Schemes. Arora also noted that the cut in duty for important parts like resistors and capacitors is a positive step, something the industry has been requesting since the SPECS scheme started.

Additional Proposals for Telecom Equipment

In addition to the proposed reductions, Sitharaman also suggested an increase in BCD by 10-15% on PCBA for specified telecom equipment. This measure is intended to encourage further value addition within the country, ensuring that more components are manufactured locally rather than being imported.

The proposed increase in duty on certain telecom equipment parts, including resistors and capacitors, is a response to industry demands since the introduction of the SPECS scheme. This move aims to balance the support for domestic manufacturing while addressing specific industry needs.

Next Steps

This budget proposal marks a significant development for the mobile and telecom sectors. As the government seeks to enhance domestic manufacturing capabilities, these changes are expected to foster growth and innovation within the industry.